This experimental study investigates two bargaining games with twosided incomplete information between a seller and a buyer. In the first game with no outside options many subjects do not use the incomplete information to their advantage as predicted. We find that a model with adjusting priors...

In persuasion problems where the receiver's action is one-dimensional and his utility is single-peaked, optimal signals are characterized by duality, based on a first-order approach to the receiver's problem. A signal is optimal if and only if the induced joint distribution over states and...

The housing rental market offers a unique laboratory for studying price stickiness. This paper is motivated by two facts: 1. Tenants' rents are remarkably sticky even though regular and expected recontracting would, by itself, suggest substantial rent flexibility. 2. Rent stickiness varies...

We consider matching-mechanism design in an environment in which agents acquire information about their preferences endogenously. Information is costly; thus, agents acquire information only if it is relevant to their decision-making. Agents' beliefs about their choice set (i.e., the set of...

Starting with a simple economic model of the value of civil litigation from each side's perspective, this paper analyses a wide range of potential litigation cost strategies, settlement offers and negotiations, together with relevant applications and insights from game theory. Specific issues...

In many markets, sellers advertise their good with an asking price. This is a price at which the seller is willing to take his good off the market and trade immediately, though it is understood that a buyer can submit an offer below the asking price and that this offer may be accepted if the...

In many markets, sellers advertise their good with an asking price. This is a price at which the seller is willing to take his good off the market and trade immediately, though it is understood that a buyer can submit an offer below the asking price and that this offer may be accepted if the...

We consider one-to-one matching problems under two modalities of uncertainty that differ in the way types are assigned to agents. Individuals have preferences over the possible types of the agents from the opposite market side and initially know the “name” but not the ”type” of the other...

Two agents endowed with di fferent individual conceptual spaces are engaged in a dialectic process to reach a common understanding. We model the process as a simple noncooperative game and demonstrate three results. When the initial disagreement is focused, the bargaining process has a zero-sum...

We consider one-to-one matching problems under two modalities of uncertainty that differ in the way types are assigned to agents. Individuals have preferences over the possible types of the agents from the opposite market side and initially know the "name" but not the "type" of the other...